2020–21 has been a challenging year for all of us. With lockdowns in place, we all started looking for new activities to while away our time while staying at home. One of them which saw a particular rise was cooking and baking. In exploring a new side of our personalities, I saw a lot of people turning into home bakers, chef and solopreneurs. They often would ask me how to continue their passion of cooking/ baking while making an earning out of it. In this blog I will attempt to give a broad idea of how you can set up a food business from home.
So how to start?
Well, first you should be able to find a niche category in which you intend to set up a food business at home. Establishing a niche is important as it gives you an edge and an idea who your target audience is. You can explore in terms of novelty, certified organic, gourmet, dietary restrictions etc.,
Do a market research and run a few surveys with your target audience on your proposed food business. If you can’t come up with an idea, run a few surveys to find out what your target audience is missing and what do they want with regards to food. You can also look into current food trends for ideas.
Once you are all set with your idea, do a thorough research on the available competitors in the market and the pricing.
Next comes to source ingredients for your food business. It is extremely important that you know what ingredients are going into your food. This is to ensure that your packaging claims match what is inside. The law governing the food safety in India requires you to ensure that you do not provide any misleading/ false information through your labels or packaging concerning your food products. Not complying with such laws may attract you a fine from Rs. 1 to Rs. 3 lakhs, which is huge. So know your ingredients, its quality, quantity, its origin, if its organic then whether it’s certified or not etc.,
Branding and Packaging
When it comes to food, branding and packaging takes a very important place because your first-time consumer is mostly the dark unless he/she tastes the food. This is where branding and packaging comes in. Your unique branding and packaging should be able to tell a story, it’s authenticity and the ability to portray a picture of how your food is going to taste even before they taste it.
This is exactly why, you drool over a food which is plated properly in those 5-star chic restaurants. For your unique branding you can consider hiring a designer. Packaging is essential, when it comes to how are you connecting with your consumer as well as taking care of the environment. A lot of businesses have now shifted to sustainable packaging, to reduce the ghastly burden the earth is already facing.
Make sure you have well-researched your competitors on pricing. Pricing is something which is very subjective and depends a lot on how your consumers take it with the quality of your food. It is very important that you take your consumers feedbacks and make changes on the way.
“The biggest challenge is dealing with the pricing when starting out small. The important thing to remember is if you have a quality product getting it in front of as many people as possible is the best way to grow. This means, in the short term forgo profit and get as many people to try your product. Overtime those cost savings will come, and you don’t want to do that prematurely.”
Licensing & Registration
If you have come up this far, well congratulations!
It is now extremely important that you obtain an FSSAI registration. FSSAI is the regulating authority in India which lays down standards to regulate the manufacture, storage, distribution, sale and import to ensure availability of safe and wholesome food for human consumption.
So if are starting a food business from home and your annual turnover is less than 12 lacs or your food production capacity is not more than 100kg/ ltr per day, you will need a mandatory registration under FSSAI. However, if you expect your turnover to cross 12 lacs- Rs 20 crore, you will also need an FSSAI licence.
In short, every food business needs a mandatory FSSAI registration even if it is from home. The process to get a registration/ licence isn’t very difficult. Just visit the FSSAI website, fill in the requisite details under FORM A/FORM B and apply online with a minimal fee of Rs.100
So what really happens, if you don’t have a registration/licence under FSSAI?
Well if you don’t and if some consumer comes up with some complain on your food product, you might find yourself in a soup. While, operating without a license can lead to fine amounting to as high as INR 5 lakhs or even imprisonment. Selling sub-standard, unsafe, misbranded or failure to comply with the law can result into imprisonment and a fine from Rs. 1–5 lakhs.
Are there any other licenses and/ registrations I need to get?
Well if you are starting from home, FSSAI registration is mandatory. Other licenses/ registrations that you might need to look out for depending on what your establishment is or your business structure is are as follows:
- Shop and Establishment Act License
- Trade license
- NOC from Fire brigade, Police, Municipality, and Society
- Eating House License and Signage License
- Environmental Clearance
- GST regsitration
- Professional Tax License
Do not get too worked up, just contact your local lawyer and he/ she will help you out.
Setting up a website
Since everything is now online, you cannot afford to miss the bus. Make a website and an app. List your products with competitive pricing. Register with e-payment portals like razorpay / instamojo to create orders and collect/receive payments. If you are a newbie, consider hiring a developer to build this whole framework, or you can set it up on wordpress/ wix or you can also list your store on shopify. If it is a packaged product, you can consider listing yourself with an e-commerce platform like amazon/ flipkart. If it is an order to eat food business, you can consider registering with delivery platforms like swiggy or zomato.
Well thats’ it! You are all ready to sell and make a remarkable food business from home. If this blog has helped you in your business, do leave a comment below.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.